Opinion: Are software patents good for business?

Opinion: Are software patents good for business?Ciaran O’Riordan
Some proponents of the patent system think it is natural to extend it to other fields, in particular software, but software development is a lot different to hardware development. Software development can be done on any general computer, no significant investment is required for equipment or machinery, and the software can then be replicated infinitely without using up resources.
In this way, it is not just an industry regulation, it can affect individuals too. Software is just a sequence of instructions, similar to sheet music or a recipe.
Traditionally, the software industry has been regulated by the copyright system. This works quite well for software since copyright is an automatic law, you don’t have to apply for it or wait for it. In contrast, using the patents system is a long, drawn out process. Avoiding copyright violations in software is easy, it’s a choice you make, but avoiding patent infringement can be impossible. A patent may not be publicly viewable until 12 months after it has been applied for, 18 months in the US.
In the software industry that is sufficient time for a complete development and release cycle.
The number of software components in a finished product makes it quite hard to check for infringements. For example, consider a company that develops a database product, their main business is selling components of their database to third parties who integrate it into their own products. This style of development is common in the software industry and generally leads to better software since components can get tested by many companies rather than many companies developing their own components.
The company cannot check their millions of lines of code for patent infringements so when a company asks them if there are any patent issues with the database, the only truthful answer is “we haven’t been threatened with any yet”. So working together becomes a legal minefield that should be avoided if possible.
The 21-year term of patents is also at odds with computer software. Not many software ideas are still usable after 21 years, the public will not benefit from the eventual disclosure so it may as well be 200 years. 21 years is also long enough to out-live many software companies. A recent phenomenon in the US is intellectual property (IP) firms approaching companies hit hard by the economic downturn and offering to buy some of their patents off them. The companies either say yes or go out of business, the IP firm then makes its money out of licensing these ideas that they have not contributed to.
A system designed to promote innovation then funds the complete opposite. Very large companies are mostly immune to these firms since they can afford to challenge them in court. Small companies are mostly immune because they don’t have any money to sue for. Medium enterprise becomes the target. At some stage, all companies must be “Medium” businesses. A common path is for the company to start small and get a venture capitalist to fund them so that they can grow into the medium business sector. This works well for all involved but how does a venture capitalist know that their investment will not simply make the small company a target for patent infringement cases?
Finally, for software to be usable, it has to behave as a user wants and expects. This means that one great new idea must be combined with many known ideas in order for it to benefit its users. The risk is that in this instance software patents can make competition illegal.
Ciaran O’Riordan is a member of the Free Software Foundation Europe www.fsfeurope.org

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